The gloomy light called subsidy.

[Vishnu.Reang]

Through subsidy the government has helped them directly. With subsidies, consumers are able to access cheaper products and commodities. Subsidy can be in any form such like cash, grants, or tax. With subsidies, consumers are able to access cheaper products and commodities. An through this, government gives people grants to support their businesses. Subsidy helps people in their hard time, huge people depend upon subsidy. It's main aim is to reduced prices, thereby improving the state of the economy.

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[harapan]

Imagine how this sounds for a European who pays double the petrol and diesel cost since half of the price is just taxes!

You can't compare only the prices of petrol without looking at other factors.
Factors like cost of living, standard of living, minimum wage, employment rate, inflation rate, per Capita income, availability of basic amenities and many more. All these factors should be considered when comparing the prices of petrol of two different countries.

It's pretty simple your country can't afford to pay the subsidies anymore, I can guess it's Nigeria??
Same thing anyhow, you can't offer subsidies if the returns are not worth it just to keep your people happy, In Venezuela, and Iran, at one point you run out of money, and then you have to face the reality that you were just wasting taxes to keep the population under control.

Which is better, to pay the subsidies and make things less expensive for it's citizens (who most of them are middle and lower class) or don't pay the subsidies and then the poor can no more afford that particular product, in this case petrol.
The price of petrol in a country like Nigeria affects everything. It's affects the price of every single goods because those goods are transported. So even if you're offering a service and needs no transportation, you will need to increase your rates in order to be able to afford stuff. That's a whole new level of inflation over again.

These countries, Venezuela, Iran, Nigeria didn't run out of money because their are no returns but because of mismanagement of funds of those responsible. When they run out of money to steal they come up with a different strategy.

[wmaurik]

Through subsidy the government has helped them directly. With subsidies, consumers are able to access cheaper products and commodities. Subsidy can be in any form such like cash, grants, or tax. With subsidies, consumers are able to access cheaper products and commodities. An through this, government gives people grants to support their businesses. Subsidy helps people in their hard time, huge people depend upon subsidy. It's main aim is to reduced prices, thereby improving the state of the economy.

Subsidies from the government can also fight companies that sell products at high prices. So that citizens can be more helped by having the same product from the government for a lower price so that citizens no longer find it difficult to get every product they want in their lives at a very affordable price level. This of course will greatly help the economy of the small community at the lower level because they can continue to rotate their capital in the small business they have to continue to make money in their life.

I agree more that subsidies from the government can continue to exist in all countries so that small business owners in each country can continue to operate and develop independently so that the country's economic conditions will also be better in the long term. Because if things like this can continue to be sustainable between the government and its citizens, then it will always give birth to prosperity in the community and there will be no prolonged difficulties in society.

[passwordnow]

Honestly, subsidy is truly a good benefit from the government. It is their duty to give subsidy to the most important services that their people need. Petrol is one of it because everything is being run and using petrol / oil for every move. Transportation, energy, and anything that we're using is being done with the use of petrol unless there's another source of it. Health care is also one of it, if a government isn't corrupt, there's a lot of sector where the government can provide subsidies. That's gonna ease the inflation rate that's being felt by everyone. On the other hand, it should be balanced, I also did saw some countries that have been giving subsidies to their people but still don't do good with their economy.

[stompix]

Imagine how this sounds for a European who pays double the petrol and diesel cost since half of the price is just taxes!

You can't compare only the prices of petrol without looking at other factors.

You just did in the other half of your response 


Factors like cost of living, standard of living, minimum wage, employment rate, inflation rate, per Capita income, availability of basic amenities and many more. All these factors should be considered when comparing the prices of petrol of two different countries.

Which is better, to pay the subsidies and make things less expensive for it's citizens (who most of them are middle and lower class) or don't pay the subsidies and then the poor can no more afford that particular product, in this case petrol.

It's not about what's better but what's sustainable and affordable by the government!
Yeah, everything is great if it's subsidized, let's have cheap energy cheap petrol, free health care, free everything, what can go wrong?

Well, I've lived in a country that had these, the pinnacle of communism where we had all these but with rations and we couldn't even afford them as we were dirt poor. Cause somebody has to pay for those subsidies and if the subsidies cost more than the returns you end up in the garbage bin just like the USRR and its satellite states.

I know it, it's great for poor people to have cheap lodging, to enjoy some affordable cheap food but if this is done in the form of subsidies somebody else is paying for it, and if the returns are not the same someone will have to continuously pay more and more for it till you have the entire population going poor and you have to subsidies them all from funds that are no longer there.

Been there, lived through that and I have seen it a hundred times, there is no way it is sustainable long term.

[Alpha Marine]

This will be a good policy if the government will sincerely use the money that will be saved from subsidy removal to invest in the country. If the saved funds will be used to build basic infrastructure that will lead to development, then it is good. But if the money will be misappropriated and stolen by corrupt government officials, subsidies should continue. In some countries, subsidized goods or services are the only benefits they get from their government.

With the rate is of inflation, subsidy removal shouldn't be what a government should be thinking about right now. They should be making moves on how to reduce inflation. The price of every single product or service has skyrocket even when the price of petrol was subsidies, so imagine what would happen when the government no longer pay fuel subsidy.

Petrol has a ripple effect on everything in an economy because almost everything needs to be transported and this transportation needs petrol. So when the petrol price goes up, transportation price goes up, therefore increasing the price of goods and services even further.

For a country as corrupt as Nigeria, you can't even trust the numbers the government put out as the amount they they spend on fuel subsidy. They could be paying half the price they put out to the public while they embezzle the other half.
I am certain that the money won't be put into better use, it would just find it's way into some people bank accounts.

[Fivestar4everMVP]

You are lucky that you have a government that subsides your petrol. But then again it's a privilege that can be taken anytime and so that's what they do? For me? I will strive hard as I know I don't have the petrol subsidy already.

Or maybe you can tighten your belt, save money or get other means of transportation so that you won't used your car like everyday. It's could have a pros/cons of the removal, but I guess your government is trying to save money as well and uses to other projects or top up other subsidies that is very important to the population.

When you say that you guess the government is trying to save money, you are not far from the truth cus that is actually the reason for the subsidy removal in the first place.

I live in the same country and like op already explained, the removal of subsidy from petrol in the country has made citizens to start paying more than 2x more for a liter of the product, compared to the amount a liter was sold before, this over 2x price goes where?, it goes to the government, so yeah, that's more money for them and for whatever project they are embarking on, but then, the big question is, can such a move save an economy that is already in shambles?

[bluebit25]

I don't know how people will view it, but I'm not too familiar with the form that appears in the periods of each country's regimes, but I have seen and heard the stories of the previous generation about the period of life during the subsidy period, it can be said that a difficult period when many problems arise, what many people imagine about a mutual support in real life is rare yes, instead the corruption of disequilibrium still lurks in all its different shades, there are periods where even now I still witness some lingering prejudices about fairness to the extent of theoretical calculation (it's not fair in practice).
The reform period appeared, the economy opened up, and people were more free to develop than through the government control apparatus, I think the problem is whether the object of application here is really suitable for The current context or not, when different countries have different problems in the social system, so the adaptation in the operation of the economy is something that I clearly see for a progress.

[libert19]

All subsidies eventually gets removed, when it does, citizens just pay normal price. Basic needs can't be escaped whether there subsidy or not.

[yhiaali3]

If the government decides to cancel subsidies on some basic materials, it must find quick solutions to cover the differences resulting from the rise in prices. Canceling subsidies without finding ways to compensate those affected by the cancellation of subsidies will cause many economic problems because this will create a state of stagnation in the markets as a result of high prices and the lack of purchasing power for most people.

Here in my country, for example, the government canceled subsidies on basic materials such as gasoline, diesel, gas, and some other basic materials, which caused a significant rise in prices and the inability of citizens to buy many goods due to the lack of salary increases, which created a gap in purchasing power, and recession began to hit Economy.

[Silberman]

If the government decides to cancel subsidies on some basic materials, it must find quick solutions to cover the differences resulting from the rise in prices. Canceling subsidies without finding ways to compensate those affected by the cancellation of subsidies will cause many economic problems because this will create a state of stagnation in the markets as a result of high prices and the lack of purchasing power for most people.

Here in my country, for example, the government canceled subsidies on basic materials such as gasoline, diesel, gas, and some other basic materials, which caused a significant rise in prices and the inability of citizens to buy many goods due to the lack of salary increases, which created a gap in purchasing power, and recession began to hit Economy.

The quick solution is the subsidy itself, long term solutions which could drive down the price of goods would at the earliest take a few years to show any results, however since politicians hold office for a very short amount of time they tend to not care about solving those issues with long term solutions, as someone else will get to claim they solved that issue when it was them the ones that solved it, so citizens are trapped in the middle and as soon as the subsidy ends the price of goods skyrocket, especially when we are talking about fuel as everything requires fuel to be made or to be transported, increasing the costs of almost everything at the same time.

[Accardo]

If the government decides to cancel subsidies on some basic materials, it must find quick solutions to cover the differences resulting from the rise in prices. Canceling subsidies without finding ways to compensate those affected by the cancellation of subsidies will cause many economic problems because this will create a state of stagnation in the markets as a result of high prices and the lack of purchasing power for most people.

Here in my country, for example, the government canceled subsidies on basic materials such as gasoline, diesel, gas, and some other basic materials, which caused a significant rise in prices and the inability of citizens to buy many goods due to the lack of salary increases, which created a gap in purchasing power, and recession began to hit Economy.

The quick solution is the subsidy itself, long term solutions which could drive down the price of goods would at the earliest take a few years to show any results, however since politicians hold office for a very short amount of time they tend to not care about solving those issues with long term solutions, as someone else will get to claim they solved that issue when it was them the ones that solved it, so citizens are trapped in the middle and as soon as the subsidy ends the price of goods skyrocket, especially when we are talking about fuel as everything requires fuel to be made or to be transported, increasing the costs of almost everything at the same time.

Subsidy on PMS alone won't help but eat deeply into the annual budget of any country. If removed would help the government to expand to other sector, which is lacking attention. A supposed country where people get fuel and probably cheap transportation and yet complain of hardship, shows the result that the country is only pumping money into one sector, the oil industry. Scholarship will fail to thrive in such country, unemployment, underemployment, poor wages etc will become a major problem in the country, while they enjoy cheap fuel. Maintaining the fuel subsidy suffers the country's economy, as the government spend huge amount of money daily. Instead of cheap fuel helping the citizens, they go ahead abusing it; pump attendants defrauding people. Fine everyone wants in cheap, but not when the government is paying for it. The money can be channeled to other sectors, such that everyone in the country can at least benefit from the annual national budget. Looking closely into the complaints after the fuel subsidy removal, it's not far from what we hear in the past when fuel was subsidized. Hence, the citizens should adapt to the current situation, and observe if the government is helping the country by removing subsidy.

[yhiaali3]

The quick solution is the subsidy itself, long term solutions which could drive down the price of goods would at the earliest take a few years to show any results, however since politicians hold office for a very short amount of time they tend to not care about solving those issues with long term solutions, as someone else will get to claim they solved that issue when it was them the ones that solved it, so citizens are trapped in the middle and as soon as the subsidy ends the price of goods skyrocket, especially when we are talking about fuel as everything requires fuel to be made or to be transported, increasing the costs of almost everything at the same time.

Yes, it is true, this is the main problem, especially for governments in developing countries. They offer quick solutions to get rid of a problem, but in reality they create dozens of other problems in the long term instead.

They care about getting rid of the current problem but they don't think about what might happen next in the long term.

[dothebeats]

The quick solution is the subsidy itself, long term solutions which could drive down the price of goods would at the earliest take a few years to show any results, however since politicians hold office for a very short amount of time they tend to not care about solving those issues with long term solutions, as someone else will get to claim they solved that issue when it was them the ones that solved it, so citizens are trapped in the middle and as soon as the subsidy ends the price of goods skyrocket, especially when we are talking about fuel as everything requires fuel to be made or to be transported, increasing the costs of almost everything at the same time.

Yes, it is true, this is the main problem, especially for governments in developing countries. They offer quick solutions to get rid of a problem, but in reality they create dozens of other problems in the long term instead.

They care about getting rid of the current problem but they don't think about what might happen next in the long term.

Good point and yes it works like that for a lot of countries. Moreover, there are instances wherein big problems are being covered up by another problem and then the cycle continues. Then soon enough these problems are push at the back of everyone's mind and they just forget about it. In the case of subsidy, the government (not saying all, but definitely a handful of them) uses it to cover up some lingering issues and problems. It's like a cover up.

[KingsDen]

Subsidy is a very broad topic in economics and in politics and it is because so many people do not understand the idea behind subsidy, that is why they complain and implement it wrongly.

• For the government of our country to subsidize either electricity, PMS or any other thing for her citizens, it therefore means that they have acknowledged that the minimum wage and purchasing power of her citizens is so poor to meet the standard of living.
• It is so dangerous to remove subsidy when the Citizens of the country have seen it as a normal way of life and not a privilege. Nigeria has been under subsidy for so many years and every government takes up the responsibility. That is why it had occurred to many of their citizens that it is their right. So the absence of the so-called subsidy has now activated suffering on the Citizens.

In order to create a balance, the government should endeavour to increase the minimum wage and fight inflation so that her citizens will have the purchasing power to fit the current price of PMS in the country.

[beerlover]

Honestly, subsidy is truly a good benefit from the government. It is their duty to give subsidy to the most important services that their people need. Petrol is one of it because everything is being run and using petrol / oil for every move. Transportation, energy, and anything that we're using is being done with the use of petrol unless there's another source of it. Health care is also one of it, if a government isn't corrupt, there's a lot of sector where the government can provide subsidies. That's gonna ease the inflation rate that's being felt by everyone. On the other hand, it should be balanced, I also did saw some countries that have been giving subsidies to their people but still don't do good with their economy.

I understand why they should be giving subsidy to petrol/oil companies but at the same time we should realize that we are not going to end up with a good result if we keep at it. Which means that they should give even more to renewable energy companies so that they could get better. Whatever is managed with oil/petrol right now, should go towards renewable energy.

It's not even about the fact that oil is bad for the world, and we should use like solar or wind or whatever, that's not really the point right now, we are talking about a situation where it's renewable, which means that it's cheaper, plus you do not need to buy it from other nations, you could build a lot of centers in any nation all around the world. You would literally power entire USA with just like quarter of Utah sized solar panels. It's that simple, subsidize that.

[Huppercase]

There are lots of things as citizens that we've enjoyed especially when it comes to essential things that government of our various countries have subsidize.
For some countries, government has helped in subsidizing food production, electricity, education,  transportation, health care services etc.
This subsidy goes ahead in reducing financial burden on the citizens.

 for some it is one way the government has helped them directly, because government gives them grants to support their businesses.
So I ask, what will happen if the government remove subsidy from some of the essential things that they helped citizens to subsidize, for example, fuel, electricity, food production, health care services etc.

Because I leave in a country, where the subsidy for PMS(petrol) has been removed, and almost immediately, the citizens are feeling the effect of the petrol subsidy removal.
The shocker this singler act has sent to the  spine of the economy of my country is second to none.
At this point, I've realised that, subsidy is one gloomy light that shouldn't be dimmed further  by any government.
Cause what other better ways can the citizens benefit from her government if subsidy is taken off from those essentials that directly touch the standard of living of the citizens.

What do you think? Is government removal of subsidy from essentials products, services at this period of economic hardship people are facing the best policy a  government can embark on in the process of building her dwindling economy?

Somethings are left not subsidized for some countries, look at UK and US for example, they either make something free for the people such as the health care and other basic amenities but not important product that will significantly pivot the economy when they no longer have the capacity to support it. Take for instance the Nigerian government and the new policy of no subsidized PMS, it has affected everyone becuase ever since beginning, corruption has eating government officials, they rather steal the allocated subsidized money than see it put into used and even with the money, the demand is high and supply is low and the new government decide to end the funding.

Google how Nigerians are trying to adjust with the new economy, you will be shock how people are suffering because fuel has literally affected everything in the country and PMS has returned to international price and since the marketers depends on foreign currency to export PMS in the country, it has affect the Foriegn exchange because the demand for $$ has deprreciated the price of Naira in the international market and as a result, every commodity in the country is affected.

The little lesson I learned from this subsidy is this, once people are use to a subsidized product price, it will be difficult to adjust to the unsubsidized rate, because the people will suffer for it; If the government can't forever subsidize price of goods, commodities, they shouldn't start it in the first place.

[Wakate]

Through subsidy the government has helped them directly. With subsidies, consumers are able to access cheaper products and commodities. Subsidy can be in any form such like cash, grants, or tax. With subsidies, consumers are able to access cheaper products and commodities. An through this, government gives people grants to support their businesses. Subsidy helps people in their hard time, huge people depend upon subsidy. It's main aim is to reduced prices, thereby improving the state of the economy.

This is where our tax comes in to help us help the government to clear some certain bills for us. Those who understand that capability of the government will know that there are some certain benefits we are enjoying now that is as a result of the tax and other things we pay the government so that it can help it citizens in some certain ways. Bad government has made life difficult for some persons especially in a country that care less about it citizens or what her citizens does. Some of these benefits that we ought to gain as a result of the tax we are paying are no longer there because of corruption.

[Vaskiy]

Subsidy is really good and a much needed one. This is a way to enrich and uplift people from the lower level to next level of living. This is the real purpose for which subsidy came into effect. In most of the countries this isn't getting followed in the right way as we will be able to see people who are filthy rich enjoying the benefits of subsidy. This is where the governments need to be corrupt free and the data management should be done perfectly so that the right person receives the subsidy and there is no need of removal of subsidy to handle the ongoing economic situation ans burden the real sufferers.

[xSkylarx]

Subsidy is really good and a much needed one. This is a way to enrich and uplift people from the lower level to next level of living. This is the real purpose for which subsidy came into effect. In most of the countries this isn't getting followed in the right way as we will be able to see people who are filthy rich enjoying the benefits of subsidy. This is where the governments need to be corrupt free and the data management should be done perfectly so that the right person receives the subsidy and there is no need of removal of subsidy to handle the ongoing economic situation ans burden the real sufferers.

This is also what I've noticed: rich people are still availing themselves of it and enjoying it, which we know is not good because it should be intended for others. I can recall when the pandemic hit as most of my neighbors are rich and working in government, and only a few houses there are poor like us, but they also got a cash subsidy as well as food, even though they still go to work. I know sometimes that they are also affected by COVID, but they are still able to survive without it, and if those subsidies were given to others worthy, that could really help a lot.